THE VILNIUS MUNICIPALITY HAD PRIVILEGED VILNIAUS PLANAS ENTERPRISE, RESOLVED THE COMPETITION COUNCIL

Having examined and assessed the findings of the completed investigation and heard the explanations of the interested parties the Competition Council passed a resolution concerning the compliance of the resolutions passed by the Council of the Vilnius Municipality on the development of the Master plan of Vilnius with the requirements of the Law on Competition. Based on the findings of the investigation the Competition Council concluded that certain items of resolutions whereby the municipality enterprise Vilniaus planas (ME Vilniaus planas) was obligated to develop the Master plan of the Municipality of Vilnius until the year 2015 infringed the requirements of Article 4 of the Law on Competition.

The investigation concerning the resolutions of the Vilnius municipality was launched in response to the application filed by the public enterprise Naujosios viešosios vadybos fondas. The facts laid down in the application readily suggested a suspicion that the resolution of the Council of the Vilnius Municipality whereby it obligated the Director of the Department of Development of the Municipality to conclude a contract with the ME Vilniaus planas could privilege the enterprise in respect of other enterprises having equal capacities to develop the Master plan of Vilnius until 2015.

The investigation established that the Master plan of Vilnius until 2005 had been developed by the enterprise Vilniaus planas the founder whereof is the Municipality of Vilnius therefore the Municipality engaged the same company to develop the 2015 Master plan. Furthermore, it had been noted that the enterprise had been awarded the tenders for the development of the Master plans of Vilnius county and Palanga town. By being an active participant in other public tenders announced by other municipalities, from the point of view of the competition law the enterprise is a potential and actual competitor to other economic entities when developing the Master plans in other towns of Lithuania. The resolutions of the Council of the Municipality of Vilnius, however, resulted in a situation where, on the one hand, the entity competes with other undertakings concerning the development of Master plans of Lithuanian towns, on the other hand it is, as a matter of exception, awarded the right to develop the Master plan of Vilnius. The ME Vilniaus planas is not a sole enterprise able to develop such plan. To provide equal conditions to all competitors a possibility to develop the Master plan of Vilnius should be provided to other undertakings. This could be ensured by organizing the public procurement tender thus allowing the undertakings in question to compete in terms of services and prices. The obligation to select a developer of the Master plan is established in the appropriate legal acts. Therefore the resolution of the Municipality, without holding the tender procedure to conclude the contract with ME Vilniaus planas had privileged the enterprise thus singling it out from other enterprises operating in the same market. Article 4 of the Law on Competition prohibits public and local authorities from passing decisions which grant privileges to or discriminate against any individual undertakings or their groups.

The above Article prohibits passing of the decisions which bring about or may bring about differences in the conditions of competition for competitors in the relevant market. Having assessed the findings of the investigation the Competition Council resolved that the Council of the Municipality by its resolutions No. 1-473 of 14-07-2004 and No. 1-537 of 13-10-2004 granted exclusive rights to ME Vilniaus planas to develop the Master plan of Vilnius thus preventing other economic entities operating in the relevant market from offering their services and putting them in unequal conditions. In cases where the differences in competition conditions cannot be avoided for the purpose of complying with the laws of the Republic of Lithuania, a clear justification must be provided. The Vilnius Municipality, however, did not provide a single reasoned criteria or argument why only ME Vilniaus planas may ensure the continuity of the Master plans. The development of the Master plan for 2005 and 2015 were the objects of individual contracts, therefore the works should be assessed as related to the provision of separate services.

While having established the infringement of Article 4 of the Law on Competition the Competition Council also considered the fact that the plan development works have already been completed (Resolution No. 1-1519 of 14-02-2007 of the Council of Vilnius Municipality approved the Master plan until the year 2015), also that the resolutions were in fact individual legal acts enforced prior to December 2006 upon completion of the established works, therefore obligating the Municipality of Vilnius to amend or revoke its Resolutions would not be an expedient decision.